Crypto influencers: which celebrities are into cryptocurrency?
Names like Kim Kardashian and Elon Musk are now crypto influencers, but does It matter?
- Keeping up with the Kardashians’ crypto
- Crypto influencers: Sportspeople, musicians and actors
- Elon Musk: who drove the DOGE up (and then down)?
- An expert's warning
Cryptocurrency is, in case you hadn’t noticed, a big deal. As is often the case when something becomes big news, a queue of celebrities forms to nail their flag to the topic’s mast, sometimes controversially. In the case of cryptocurrency, these famous names – let’s call them crypto influencers – are bringing attention to the market, with one star‘s pronouncement hailed as “the financial promotion with the single biggest audience reach in history”. But who are they and what does it mean for crypto? Let’s find out.
Keeping up with the Kardashians’ crypto
When it comes to the world of celebrities, few names are bigger than Kim Kardashian. The reality show star is hugely popular and when she talks her fans listen. This summer, however, she was rapped on the knuckles by the UK financial regulator. On 14 June, the star posted a message about ethereum max, a token on the Ethereum blockchain, on her Instagram Stories – a feed in which messages only remain visible for 24 hours. She said: “This is not financial advice but sharing what my friends just told me about the ethereum max token!
“A few minutes ago Ethereum Max just burned 400 trillion tokens – literally 50% of their admin wallet giving back to the entire e-max community.”
Although the star flagged the post as an advert, condemnation soon followed. On 7 September, Charles Randell, chairman of the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) said: “When [Kardashian] was recently paid to ask her 250 million Instagram followers to speculate on crypto tokens by ‘joining the Ethereum Max Community,’ it may have been the financial promotion with the single biggest audience reach in history.”
He told the Cambridge International Symposium on Economic Crime: “I can’t say whether this particular token is a scam. But social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation. Some influencers promote coins that turn out simply not to exist at all.”
Ironically, EMAX went down after Kardashian promoted it. The coin started 14 June at $0.00000023 and closed at $0.00000019, a drop of more than 17%. In this instance, one of the world’s biggest potential cryptocurrency influencers did not have the effect the cryptocurrency would have liked.
Crypto influencers: Sportspeople, musicians and actors
Tom Brady and Gisela Bundchen together form what the medial likes to call a power couple. The American football legend and his supermodel wife hold a lot of sway in certain circles. In September 2021, the pair starred in an advert for crypto exchange FTX. They’re not alone – other sportspeople, such as tennis legend Serena Williams and boxing icons Mike Tyson and Floyd Mayweather, have also become involved and been labelled as crypto influencers. Earlier this year, Williams invested in the Bitcoin rewards company Lolli. This was the same company that actor Ashton Kutcher invested in previously.
Williams also famously owned shares in the Coinbase exchange at one point. Mayweather lived up to his “Money” nickname when he promoted an initial coin offering (ICO) from the crypto company Centra Tech. Unfortunately for the star, he and music producer DJ Khaled were fined a combined $767,500 by the United States Securities and Exchange Commission (SEC) for not disclosing that they had been paid to do so. Meanwhile, Tyson lent his image to a bitcoin ATM cash machine. The so-called “Baddest Man on the Planet” also asked his Twitter followers whether they preferred bitcoin to ethereum.
Other famous names who combine celebrity and cryptocurrency include rappers Megan Thee Stallion, 50 Cent and Kim Kardashian’s former husband Kanye West, socialite Paris Hilton, actors Gwyneth Paltrow, Lindsay Lohan and Neil Patrick Harris, and director Spike Lee.
One celebrity who isn't involved in cryptocurrency is British TV host Holly Willoughby, whose face was used by scammers in an advert for a bitcoin investment scheme. Other celebrities have also had their names falsely linked to cryptocurrencies, including Meghan Markle, Amstrad founder and Apprentice star Lord Alan Sugar, chef Gordon Ramsay, the founder of moneysavingexpert.com Martin Lewis, and two Dragon's Den stars, Deborah Meaden and Peter Jones.
Elon Musk: who drove the DOGE up (and then down)?
When it comes to cryptocurrency celebrities, though, there is a case to be made that a celebrity endorsement can be counterproductive if it does not fit well, or the celebrity says the wrong thing. In April this year, dogecoin was hot. Its status as a meme coin – one driven by mentions on social media – didn’t harm its fortunes and may even have increased its support as people began investing in it in a big way. The coin started the month at $0.05365 and went up and up until, on 8 May, it was trading at an all-time high of $0.7376. That is a price increase of almost 1,275% in just over a month.
A big part of DOGE’s growth was believed to have come from the support given to it by Elon Musk, chief executive of Tesla and SpaceX, who, seemingly, never missed an opportunity to hype the coin, raising its profile and increasing the public’s interest and, crucially, willingness to invest in it. With Musk’s reputation for new technology, it is easy to see why he has become one of the top crypto influencers. He is not the only famous person to promote DOGE, however: Kiss bassist Gene Simmons has also expressed enthusiasm for the coin, as has rapper Snoop Dogg.
What works on Twitter, though, does not always work in the offline world. On 8 May, at around the time DOGE was trading at record highs, Musk appeared on American TV institution Saturday Night Live. During the show, he was asked what dogecoin was, to which he replied: “It’s the future of currency. It’s an unstoppable financial vehicle that’s going to take over the world.”
Resident comedian Michael Che replied: “So, it’s a hustle?” Musk responded jokingly: “Yeah, it’s a hustle.”
This off-hand comment, coupled with a joke earlier in the show where Musk’s mother, Maye, said she hoped her son’s Mother's Day gift was not dogecoin, saw the value of the altcoin tumble substantially, hitting a low of just under $0.48 on the morning Sunday 9 May.
Although Musk did bring dogecoin to the attention of millions, it was not necessrily helpful attention and, coupled with the after effects of the great crypto day crash of 19 May, the coin’s price has never really properly recovered and was trading at around $0.24 on 15 September. Nevertheless, Musk still maintained his power to have an impact on a coin’s price. When he tweeted a picture of his pet shiba inu puppy Floki on 12 September, the news sent the price of the shiba floki coin up nearly tenfold in about 24 hours
An expert's warning
Celebrities investing in cryptocurrency, or potentially encouraging their fans to do so, is not without controversy. There is a concern that we could see famous people influencing their fans to invest in something that they do not understand. In an exclusive interview with Currency.com, Marvin Ryder, Professor of Marketing at the DeGroote School of Business at McMaster University, Canada, said he thought some celebrities might have “a poor understanding of finance and financial markets”, adding:
“If Kim Kardashian or Britney Spears was going to offer me any financial advice, I would be quite sceptical. Perhaps if a 'shark' from Shark Tank or 'dragon' from Dragon's Den offered an endorsement, it would have more credibility but I also know that most endorsements are compensated. Does the celebrity really believe this is a good investment or is it a good investment because someone paid them $500,000?”
Professor Ryder was also sceptical about the possibility of celebrities investing in cryptocurrency themselves, saying: “It would be interesting if the celebrity took their payment in something other than cryptocurrency. Because so much could go wrong, I don't see why any celebrity would risk tarnishing their name, unless they were already so tarnished that they had little left to lose.”
The professor also said that the celebrity’s background in cryptocurrency was important:
“If the celebrity comes from the world of sports or acting or music, their interest in anything financial is really more of a hobby. It would have little credibility for me. If the celebrity comes from the world of finance, say a [Berkshire Hathaway tycoon] Warren Buffett or a [Former hedge fund manager and US TV host] Jim Cramer or even a [Canadian businessman and TV personality] Kevin O'Leary, I would give their words more credence but the whole world of cryptocurrencies is so new and so much like the wild, wild west, I would still be reluctant to give much credence to a celebrity endorsement.”